GRA
W.R. Grace & Co.
Industrial/Transportation
07/10/2014
Presented
| Date | 07/08/2014 |
| Price | $76.68 |
| Market Cap | $7.09B |
| Ent Value | $7.75B |
| P/E Ratio | 27.32x |
| Book Value | $5.02 |
| Div Yield | N/A |
| Shares O/S | 76.30M |
| Ave Daily Vol | 630,000 |
| Short Int | 1.70% |
Current
| Price | $69.99 |
| Market Cap | $4.67B |
| W. R. Grace & Co. produces and sells specialty chemicals and materials worldwide. It operates in three segments: Grace Catalysts Technologies, Grace Materials Technologies, and Grace Construction Products. The Grace Catalysts Technologies segment provides fluid catalytic cracking (FCC) catalysts for the production of transportation fuels, including gasoline and diesel fuels, and other petroleum-based products; FCC additives; hydro processing catalysts used in process reactors to upgrade heavy oils into lighter; polyolefin catalysts and catalyst supports for the production of polypropylene and polyethylene thermoplastic resins; and chemical catalysts used in various industrial, environmental, and consumer applications. The Grace Materials Technologies segment offers silica-based and silica-alumina-based engineered materials used in coatings and print media, consumer, and industrial applications, as well as pharmaceutical, life science, and related applications; and packaging materials, such as can and closure sealants, coatings for cans and closures, and scavenging technologies. The Grace Construction Products segment offers specialty construction chemicals comprising concrete admixtures and polymeric fibers; additives used in cement processing; and products for architectural concrete consisting of surface retarders, coatings, pigments, and release agents; admixtures for masonry concrete; and process control solutions for ready mix concrete. This segment also provides specialty building materials for new construction and renovation/repair projects that include waterproofing membranes for commercial and residential buildings; specialty grouts for use in waterproofing and soil stabilization applications; air and vapor barriers; and other products for the preventative and repair applications. W. R. Grace & Co. was founded in 1854 and is headquartered in Columbia, Maryland. |
Please note, on February 03, 2016 GCP Applied Technologies Inc. (GCP) was spun off from W. R. Grace & Co. (GRA). Presented price has been adjusted to account for the split, but other presented data values and the idea text remains unchanged.
Publicly traded companies mentioned herein: Albemarle Corp (ALB), W.R. Grace & Co. (GRA)
Highlights
The presenter is long shares of W.R. Grace (GRA), the global specialty chemicals manufacturer of catalysts (37% of revenue) for fluid catalytic cracking (FCC) processes, as well as Construction Products (34% of revenue) and Materials Technologies (29% of revenue). He likes the diversification of the company’s end markets, consistent FCF generation, and solid margins and ROC. However, he noted that GRA has had its missteps. The business was “on cruise control” (prices and volumes were rising) up until the end of 2012/ early 2013 when management mistimed a large price increase. The market was not as tight as they had thought, and GRA lost the entire price increase as well as a chunk of market share to Albemarle. On top of that, refinery production levels were/ have been disappointing. Today, with shares trading in the low $90s and the potential for volumes to turn up near-term, he thinks the risk/ reward is favorable.
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